INTERNAL REVENUE SERVICE
memorandum

DATE:
October 12, 2001

TO:

Director, EP Examinations


Director, EP Rulings & Agreements


Director, EP Customer Education & Outreach



FROM:
Director, Employee Plans /s/ Carol D. Gold

(Tax Exempts and Government Entities Division) T:EP

SUBJECT:
FY 2002 Employee Plans Work Plan

This memorandum transmits the approved FY 2002 Program Guidance for
implementing the EP portion of the TE/GE Strategic and Program Plans. The work
plan was developed jointly by representatives from each of your offices. I want to
personally thank all of those on your staff who contributed to the development of
these guidelines.

As is more fully described in Attachment I, the Plan is structured to align to the
budget and program activity codes in the TE/GE Strategic and Program Plans.
There are attachments for each Business Segment following this structure as well as
ones for “Other Operational” items and Training. We will reassess the Plan at mid-
year to determine if adjustments should be made because of the volume and timing
of the GUST determination receipts.

A copy of this document will be placed on the EP Intranet website under the EP
Director homepage. A copy will also be placed on the IRS Internet website at
www.irs.gov/ep. An Executive Summary has been included to provide employees
with a brief overview of the program priorities for Customer Education & Outreach,
Rulings & Agreements and Examinations. While the work plan provides more
detailed guidance than most 1st line managers and employees need, the Executive
Summary should at least be shared with them.

This year, unlike FY 2001, work plans were developed for each of the Area Offices,
the Washington Post of Duty (WPOD) and the three Key Processes (CE&O,
Examinations and Rulings & Agreement – Ohio). However, only the national EP
work plan (Form 5440) is attached.

Training should be delivered consistent with the national training plan. Advance
approval is required by this office for any training that has dollar implications and was
not part of the original training plan.

If you or your staff have any questions regarding this matter, you may contact me at
(202) 283-2100, or, you may contact Rick Westley at (202) 283-9513.

Attachments:

cc:
Area Managers

Manager, Voluntary Compliance

Manager, Technical Guidance

Manager, Determinations


Manager, Determinations Quality Assurance

Manager, Technical


2

FY 2002




Program Guidance






October 11, 2001

3

FY 2002 EP WORK PLAN
PLANNING GUIDELINES

TELEPHONE CONTACTS

General Questions
Rick Westley

Staff Contact:
Ola Josey
(202) 283-9513


(202) 283-9510
Customer Education &
Outreach
Mark O’Donnell

Staff Contact:
Peter McConkey
(202) 283-9532


(202) 283-9531
Rulings & Agreements Paul Shultz

Staff Contact:
Bruce Settell
Joyce Kahn
Ken Yednock
(202) 283-9663


(513) 263-3608
(202) 283-9586
(202) 283-9585
Examinations

Preston Butcher

Staff Contact:
Joe Barthelmes
(410) 962-4092


(410) 962-3709
Other Operational
Ola Josey
(202) 283-9510
FY 2002 Training
Courses
Kim Greenbaum
Al Reich
(410) 962-4043
(954) 423-7709
Planning Assumptions
Workbook (Form 5440)
John Hayes
(323) 869-3914

4
FY 2002 EP WORK PLAN
PLANNING GUIDELINES

TABLE OF CONTENTS

ATTACHMENT I

EP PLANNING PROCESS

ATTACHMENT II

BAC 21 – PRE-FILING TAXPAYER ASSISTANCE &
EDUCATION:


ATTACHMENT IIA
PAC 1B - TAX LAW INTERPRETATION AND
PUBLISHED GUIDANCE -



TECHNICAL GUIDANCE



(WITHIN RULINGS & AGREEMENTS)



PLANNING GUIDELINES

ATTACHMENT IIB
PAC 1C - TAXPAYER COMMUNICATION




AND EDUCATION -



CUSTOMER EDUCATION &



OUTREACH PLANNING GUIDELINES

ATTACHMENT IIC
PAC 1E - RULINGS & AGREEMENTS -



DETERMINATIONS,



VOLUNTARY COMPLIANCE &



TECHNICAL ACTIVITIES



PLANNING GUIDELINES



ATTACHMENT III

BAC 37 - COMPLIANCE SERVICES:





PAC 7G - TAX REPORTING COMPLIANCE FIELD
EXAM




EXAMINATIONS PLANNING




GUIDELINES

ATTACHMENT IV
OTHER OPERATIONAL PLANNING GUIDELINES

ATTACHMENT V
FY 2002 TRAINING COURSES

ATTACHMENT VI
Form 5440



5
FY 2002 EP
PLANNING
GUIDELINES


TABLE OF CONTENTS

Page
Executive Summary
5
Attachment I – EP Planning Process
7
Integration of Budget Planning with Work Planning
7
Document 6476
9
Activity Codes
9
Management Information Reports
10
Measures/Indicators
10
Glossary
12
Attachment IIA – PAC 1B – Tax Law Interpretation and Published Guidance
EP Technical Program Guidance
13
Attachment IIB – PAC 1C – Taxpayer Communication and Education
EP Customer Education & Outreach Program Guidance
14
Overview
14
Customer Education Program (Direct Contact)
15
Outreach (Indirect Contact)
17
Attachment IIC – PAC 1E – Rulings & Agreements
EP Rulings & Agreements Program Guidance
22
Determination Program
22
Voluntary Correction Program (Under EPCRS)
26
Opinion Letters/Rulings
27
Attachment III – PAC 7G – Compliance Services
EP Examination Program Guidance
28
Examination Program
30
Compliance Research Program
33
Examination Support Activities
37
Attachment IV – Other Operational Program Guidance
40
Attachment V – FY 2002 EP Training Courses
42
Attachment VI – Form 5440





6

FY 2002 Employee Plans Work Plan
Executive Summary

The EP work plan is designed to provide program guidance to all EP employees for FY
2002. Program priorities are provided in each of the three primary program areas:
Customer Education & Outreach (CE&O), Rulings & Agreements (R&A) and Examinations.

The primary organizational challenge will be our ability to timely process the increase in
determination receipts due to plan sponsors amending their plans for GUST. This will
require the shift of resources from examinations, the establishment of technical screening
sites outside of Cincinnati and the providing of “just in time” refresher training for those
agents who have not worked determination cases for an extended period.

The Customer Satisfaction ratings for the latest quarter (period ending March 2001) for
both determinations (5.65 out of a possible score of 7.0) and examinations (5.69) remain at
a very high level and are a positive reflection on all front-line employees and the EP
organization. However, continuing efforts should be focused on addressing areas where
opportunities for improvement exist.

It is also incumbent that managers at all levels of the organization use the results of Survey
2001 to address identified areas for improvement. Those issues that cannot be resolved at
the local level must be elevated to the next managerial level for resolution.

The program priorities of each program area are listed below. Additional information on
these priorities, as well as specific performance goals, is contained in the respective
attachments.

A. Customer Education & Outreach

1) Complete the hiring needed to fill all positions within CE&O;
2) Establish partnerships with customer and stakeholder groups to better address
growing customer demand for information and services;
3) Implement a marketing strategy to encourage the use of standardized plans;
4) Improve determination letter communications, application and review processes;
5) Define and develop methods for measuring the effectiveness of the customer
education program and outreach activities; and,
6) Develop data management tools for compliance resolution and outreach
programs.


7

B. Rulings & Agreements


Determinations
1) Apply needed resources to the Volume Submitter and Master & Prototype applications
so that letters can be issued on these plans by February 1, 2002;
2) Establish technical screening sites outside of Cincinnati to minimize any inventory
backlogs that may result from the expected increase in determination receipts;
3) Provide “just in time” determination refresher training to those Area Office agents
reassigned to assist with the determination workload;
4) Establish a “determination help desk” to assist agents in the Area Offices with
determination questions;
5) Take specific actions to address areas of improvement that have been identified
through both the customer satisfaction survey and TEQMS results;
6) Take actions to timely recruit and hire specialists consistent with the EP hiring plan;
and,
7) Support the redesign and enhancement of the Determination Letter System (EDS).


Voluntary Compliance
1) Complete the hiring needed to fill all Voluntary Compliance positions;
2) Develop national procedures for the processing of all voluntary compliance cases;
3) Establish the Voluntary Compliance Council; and,
4) Revise Revenue Procedure 2001-17 based on comments that have been secured from
both internal and external stakeholders.


Technical Guidance
1) Issue technical guidance based on the priorities identified in the annual Guidance Plan

C. Examinations

1) Monitor examination inventory levels to allow for a timely changeover from examination
to determination inventories;
2) Implement the EP Team Audit program (EPTA);
3) Take specific actions to address areas of improvement that have been identified
through both the customer satisfaction survey and TEQMS results;
4) Coordinate with the Office of Research & Analysis to integrate the EP Compliance Risk
Assessment into examination planning;
5) Conduct market segment examinations under the Compliance Research Program to
determine compliance levels; and,
6) Take actions to timely recruit and hire specialists consistent with the EP hiring plan.


8

ATTACHMENT I
EP Planning Process


INTEGRATION OF BUDGET PLANNING WITH WORK PLANNING

The new IRS strategic and planning process is designed to integrate resource allocation
with strategic and program planning to determine the most effective use of those resources.
Within Tax Exempt and Government Entities (TE/GE) Division, each segment (EP, EO, GE
and CAS) will develop the following components:

a.)
Strategic and Program Plan – identifies specific trend issues and problems (TIPs)
and details the strategies that will be applied to address them. The strategic and
program plan summarizes the operating priorities and improvement projects for
each approved TIP. In order to integrate planning with the budget process,
strategic assessments are prepared two years in advance. For example, in the
2nd Quarter FY 2001, strategic assessments were developed for FY 2003. For
EP the identified TIP for FY 2002 is to “Address Employee Plans Determination
Workload Variations.” It summarizes the programs applicable to each operating
function, briefly describing each programs current operations and future
operations for the next two years. The operating priorities and improvement
projects (identified in the strategic plan) are detailed where applicable under each
program. The program plan identifies the resources (labor and non-labor)
needed for current and future operations by each applicable program.

b.)
Work Plan – based on the operating priorities and improvement projects outlined
in the Program Plan, resources are allocated among the key EP processes for
the upcoming fiscal year.


 Technical Guidance

 Opinion Letters/Rulings

 Voluntary Compliance

 Determinations

 Examinations

 Customer Education &Outreach (CE&O)

Specific program guidance is provided for each of these areas. The resource
allocation is then used to plan staff days to be applied and the number of cases
that will be worked.



9

These three plans are linked through a structural planning and budget layout of the
following codes.

- Budget Accounting Codes (BAC) (Pre-filing Services, Filing and Account
Services, General Management, Compliance Services, Research and SOI)

- Program Accounting Codes (PAC) (subcategories within each BAC)
- Activity Codes (AC)
- Project Codes (PC)

Of the two major BACs in which EP performs activities, only one (BAC 21) has multiple
PACs under it.

BAC 21 – Pre-filing Taxpayer Assistance & Education, Under this BAC, Employee
Plans has three PACs as follows:

PAC 1B – Tax Law Interpretation and Published Guidance
This PAC primarily pertains to the Washington post of duty (WPOD) in
developing guidance published by the Service, providing technical assistance
to Treasury on regulations and proposed legislation, to Congress on new law
and to Counsel and other federal agencies. It also involves internal technical
assistance.
PAC 1C – Taxpayer Communication and Education
This PAC pertains to Customer Education and Outreach (CE&O). The
Education Program entails direct contact with the public through IRS
participation in conferences/seminars/workshops and the delivery of
speeches either individually or as part of a panel to enhance the public’s
awareness of pension law and the different programs the Service offers. In
contrast, the Outreach Program involves indirect contact through newsletters,
publications, websites and customer partnerships.
PAC 1E – Rulings & Agreements (R&A)

 Determination Letter Program – This includes all time devoted to processing
applications in Cincinnati and the Area Offices.

 Opinion Letters/Rulings - This includes all of the technical and Actuarial groups in the
WPOD, including the field actuaries. Activities include the issuance of opinion letters to
M&P sponsors, IRAs, SEPS and SIMPLES; private letter rulings; Technical Advice
cases and technical assistance.

 Voluntary Compliance Program (VC) – This includes all coordination activities and case
work associated with the VC program enumerated in Revenue Procedure 2001-17.

NOTE: A change that occurred too late to modify the 5440 and stublines of the reports is
the section identified as PAC 2C – Electronic/Correspondence Assistance. This is now part
of PAC 1E and identified as Assistance. (see Attachment III)

BAC 37 – Compliance Services – the remaining EP work falls under this BAC, which is
comprised of only one PAC.


10


PAC 7G – Tax Reporting Compliance – Field Exam


The Examination Program consists of 6 Area Offices that were designated to
do examinations. However, due to the fluctuations in determination receipts
and the level of experienced agents, the Area Offices also provide resources
to support the determination program, CE&O activities and the VC program.

Document 6476
In an effort to reduce the length of this document, the Monitoring Codes that usually appear
as an exhibit have been removed this year. Document 6476 (Yellow Book), which lists all of
the monitoring codes, is no longer disseminated via a distribution list, but must be ordered
through the Distribution Centers. We strongly encourage all managers to ensure that
everyone completing a tech time report is given a copy and encouraged to familiarize
themselves with the changes. This document should be in the Distribution Center by
10/1/01. Document 6476 can also be obtained from the IRS Intranet home page at:

http://www.tege.web.irs.gov/hq/systems/documents/codes/doc_6476_ep_02.pdf

This site will pull up the PDF file, which can be viewed or printed.

Activity Codes
There are several significant changes to the activity codes for FY 2002:


 CE&O (A/C 150), R&A (A/C 190) and Exam (A/C 163) all have a new Activity Code for
their respective “Support Activities” called “Compliance Planning/Monitoring”, which
allows each key process to plan and monitor as well as track the time spent on this
activity.

 CE&O and VC both have greatly restructured their Activity Codes resulting in not only
more codes, but greater detail in their definitions.

 Two new Activity Codes were added for “General NTEU Activities”, which used to be
included in “Indirect Admin” and “Partnering Council.”

Although it is not new, there is still a code available to track “Case Related
Management” activity, allowing managers to capture direct case related time.

Please refer to Document 6476 for detailed definitions of these as well as all other
Monitoring Codes. Questions on the activity codes should be directed to Ola Josey of the
Program Management staff at (202) 283-9510.


MANAGEMENT INFORMATION REPORTS (MIRs)

The technical time MIRs will follow the same structural layout as noted above. The MIRs
will be sorted by the use of business segment codes and organization codes. For example,
each of the eight examination areas (six Areas, Planning & Review, and Team Audit) will
be sorted either by unique business segment codes (or, in the case of EPTA by unique Org
Codes), but will be combined into a total US summary of all EP examinations. Some
employees within Examinations and Rulings & Agreements will be providing services
outside of their “default office”.



11
Example I:
If an examination agent is working determinations (DLs), the time spent on DLs will
be accounted for under PAC 1E – Rulings and Agreements. But the time spent
working exams should be accounted for under PAC 7G – Tax Reporting Compliance
– Field Exam.

Example II:
If an agent/tax law specialist assigned to Rulings & Agreements performs services
for CE&O (either by making a speech or mentoring someone), the time spent should
be accounted for under PAC 1C (Customer Education & Outreach), even though the
employee’s default office is Rulings & Agreements under PAC 1E.

MEASURES/INDICATORS

Each of EP’s measures/indicators directly relates to their respective BACs and PACs
except Employee Satisfaction, which applies to all BACs and PACs.

BAC 21

 PAC 1B - Tax Law Interpretation

 Guidance Documents Published


 PAC 1C - Taxpayer Communication and Education (3 of the measures have recently
been established and baseline information will be gathered in FY 02)

 CE&O Time Applied (FTEs)

 Number of Outreach Efforts (Baseline)

 Customers Reached – Direct (Baseline)

 Customers Reached – Indirect (Baseline)


 PAC 1E – Rulings and Agreements is comprised of 3 Key Processes:

Determination Letter Program has 4 measures:

 Customer Satisfaction

 Cases Closed

 Timeliness (cycle time)

 Quality (TEQMS results)



Voluntary Compliance Program

 EP Voluntary Compliance Cases Closed


Opinion Letter/Rulings Program

 EP Technical Activities Closed

BAC 37

 PAC 7G (Tax Reporting Compliance – Field Exam)


Examination Customer Satisfaction


Examination Quality


Examination Timeliness (cycle time)


Examination Cases Closed


Team Audit/CEP Examination Time Applied

Employee Satisfaction is a measure for EP, but it applies to all PACs.


12
GLOSSARY of TERMS


 Resources – The budget uses two types of resources, labor and non-labor.


Labor – consists of Technical and Other.

 Technical – Revenue Agents/Tax Law Specialists or anyone
who completes a 6490.

 Other – Support staff and anyone else in EP who does not
complete a 6490.


Non-labor - Travel, Services and Supplies, etc


 Segment – Previously known as Branches (EP, EO and GE). GE is further organized
to three sub-segments (FSLG, ITG and TEB). These three plus EP and EO are referred
to as Business Units.


 Strategic Assessment – A self assessment done by each Segment to
identify any trends, issues or problems (TIPs).


 Strategic and Program Plan – The highest level of the planning system, which is
developed from the strategic assessment.


 TIPs – Trends, issues or problems that are emerging, which should be
addressed in the coming years.


 Program Plan – Summarizes the programs in brief descriptions and highlights high level operations while
outlining projected goals.


 Work Plan – Planned operations are defined based on annual planning guidelines and planning
assumptions.


 BAC – Budget Accounting Code used to link the type of Service-wide process to the budget.


 PAC – Program Accounting Code used to segregate like programs under one BAC.


 Activity Codes – Used to account for like activities.


 Project Codes – Further definition of compliance activities into individual projects


 Key Processes – The main processes under each Segment. For EP, they are: Examinations,
Determinations, Opinion Letters/Rulings, Voluntary Compliance, Technical/Published Guidance and
Customer Education & Outreach.


13

ATTACHMENT IIA
PAC 1B – Tax Law Interpretation And
Published Guidance

EP Technical Program Guidance

I.
TECHNICAL/PROCEDURAL GUIDANCE

Technical guidance is an integral part of an Agent’s/Tax Law Specialist’s tools for applying
pension law and keeping abreast of the its frequent changes. The interpretation of law and
development of the IRS procedures as they apply to the Determination Program or the
Examination Program is the optimal way to assure consistency. The availability of timely
guidance not only promotes efficiency, but it facilitates professionalism that enhances both
employee satisfaction as well as customer satisfaction.

Published Guidance items facilitate taxpayers in amending and submitting pension plans
within the existing GUST remedial amendment period, covering amendments required by
the passage of "EGTRAA 2001", which will result in a significant number of guidance items.
Guidance items include procedures, model amendments and substantive items.

The objective is to provide timely and complete technical guidance consistent with the
annual Guidance Plan that is established in conjunction with Counsel and Treasury.

PERFORMANCE MEASURE


The number of guidance documents published will be used as an indicator of performance.

Employee Plans
FY2001
Plan
FY2002
Goal
Guidance Documents Published
48
48



14

ATTACHMENT IIB
PAC 1C – Taxpayer Communication and
Education

EP Customer Education & Outreach
Program Guidance

OVERVIEW

Customer Education & Outreach (CE&O) will focus on helping EP external customers
understand their tax responsibilities by achieving the following objectives:


Develop a tailored education program focused on customer sub-segments.

Monitor non-compliance trends to design proactive outreach products for use by
customers.

Each office should fully support all opportunities for education and outreach to customers.
EP’s compliance activities relating to CE&O include both direct and indirect contacts with
external customers. The Customer Education Program involves direct contact with
customers through IRS participation at conferences/seminars/workshops and the delivery
of speeches either individually or as part of a panel. Outreach involves indirect contact
with customers through newsletters, publications (includes educational videos and
interactive CDs), websites and customer partnerships.

CE & O will support and leverage the programs of the other two key processes
(Examinations and Rulings & Agreements) through both the Customer Education
Program and Outreach.

For FY 2002, CE&O will support and leverage the compliance activities of Area Office
employees (see Examinations Program Guidance) on the following specific market
segments where both the Compliance Planning Phase and the Case Selection/Training
Phase have been completed: IRC 403(b)/457 Plans; Multiemployer Plans and IRC 401(k)
Plans).

CE&O will also participate in the Compliance Planning Phase for three new Nationwide
Research Samples (see Examinations Program Guidance) on Non-Filers, SEP Adopters
and Third Party Administrators. As with the activities relating to the above noted Market
Segments, CE&O will explore options available to support and leverage any compliance
activities relating to the three new research samples.

15

PERFORMANCE MEASURES


The following performance indicators will be used in FY 2002 for assessing the
effectiveness of CE&O programs and activities:

Employee Plans
FY2001
Plan
FY2002
Goal
Education & Outreach FTE
40
42
Number of Outreach Efforts
N/A
Baseline
Customers Reached (direct)
N/A
Baseline
Customers Reached (indirect)
N/A
Baseline
Standardized plans adopted
N/A
Under
development

I. CUSTOMER EDUCATION PROGRAM (Direct Contact)

CE&O initiatives will be identified through direct contacts (Customer Education Program)
either by initiated contacts from EP customers or from EP initiated contacts as part of
proactive education to customers. These initiatives will yield customer educational
events (such as EP Benefits Conferences and speeches/panels/workshops). In
coordination with R&A and Examination, strategies will be determined for initiating direct
contacts to key customers based on identified market segments to provide proactive
education to those customers.

To fully support the deliverers of customer education, CE&O will coordinate and monitor the
TE/GE Speaker Mentoring Pilot Program. This pilot program includes a mentors portion
and speakers portion. The program will match a mentor to each speaker wanting to
improve his or her presentation skills. The mentors will work with their designated
speakers in a non-evaluative manner by providing feedback and suggestions for improving
the quality of the speakers’ presentation skills. Efforts will be undertaken to establish the
EP Customer Education Cadre. This cadre will include two specific sub-cadres: EP
Speakers Cadre and EP Outreach Cadre.

In FY 1999, EP initiated a pro-active customer education initiative relating to IRC 403(b)
Plans. This initiative is called Partnership for Compliance, which is designed to create a
partnership between the IRS and its customers in order to increase understanding and
compliance with the tax law applicable to section 403(b) tax-sheltered annuities.
Partnership for Compliance for IRC 403(b) Plans is one part of a triad of compliance
activities, which includes the examination program, voluntary correction programs, and
customer education & outreach. This triad forms the EP Compliance Model. This model
addresses and encourages voluntary compliance with all applicable tax laws relating to
employee benefits plans.

Under Partnership for Compliance for IRC 403(b) Plans, trained and experienced IRS
employees (deliverers) will be made available to provide educational services relating to
section 403(b) tax-sheltered annuity arrangements. Such services include delivering
speeches, participating in panel discussions, conducting training sessions and helping
prepare newsletter articles. Organizations/taxpayers interested may request educational
services. Customers may obtain details on Partnership for Compliance via the IRS
Internet Site at the following address:
http://www.irs.gov/prod/bus_info/ep/outreach.html

16

The Area Offices and Rulings & Agreements have designated IRC 403(b) Educational
Coordinators to handle technical aspects of Partnership for Compliance for IRC 403(b)
Plans.

In FY 2002, EP will be expanding Partnership for Compliance to include IRC 457
Plans, Multiemployer Plans and IRC 401(k) Plans. As needed, additional educational
coordinators will be named. Various outreach products to pro-actively communicate to
external customers the EP Compliance Model will be used. For example, the Employee
Plans Corner on the IRS Internet Site will be used to communicate the various compliance
programs applicable under the EP Compliance Model and how customers may request
educational services, obtain educational products, obtain voluntary compliance services or
learn about issues/trends observed from ongoing/completed examinations.

EP Benefits Conferences – Relates to benefits conferences that are either sponsored or co-
sponsored by the IRS. These conferences include the following:
- Great Lakes Benefits Conferences
- Employee Benefits Conference (Mid-Atlantic & Gulf Coast
Areas)
- Cincinnati Employee Benefits Conference
- Northeast Benefits Conference
- Los Angeles Benefits Conference
- SWBA/IRS Employee Benefits Conference

Planning/coordination includes all activities involved in planning and coordinating each EP
Benefits Conference. Preparation includes all activities involving delivers (i.e., speakers,
panelists, exhibit booth participants, conference workers) occurring before the actual
conference. Delivery includes the activities of deliverers necessary to travel to/from and to
attend the conference.

EP participants at benefits conferences who are not deliverers will not charge technical
time to EP Benefits Conferences but should use Activity Code 685 (EP Benefits
Conferences Participation under Training).

Speeches/Panels/Workshops – Relates to IRS employees who are involved in
Speeches/Panels/Workshops. Involvement includes planning/coordination, preparation,
delivery or participation. For customer education relating to IRC 403(b)/457 Plans,
Multiemployer Plans, and IRC 401(k) Plans, there are separate technical time activity
codes to identify customer education to each of these market segments (as part of EP’s
overall efforts to increase compliance in these segments).

Planning/coordination includes all activities involved in planning and coordinating each
speech/panel/workshop. Preparation includes all activities involving deliverers (i.e.,
speakers, panelists, exhibit booth participants, workshop participants) occurring before the
actual conference. Delivery is applicable for only employees that actually deliver customer
education and includes the activities necessary to travel to/from and to attend the actual
speech/panel/ workshops. Participation is applicable for all other employees who are not
directly delivering but support the Customer Education Program and includes the
activities necessary to travel to/from and to attend the actual speech/panel/workshop.
Participating employees who attend speeches, panels and/or workshops must support
customer education by networking at the customer educational events and/or assisting the
IRS employee(s) delivering speeches, panel discussions or workshops.


17
IRC 403(b) Plans/IRC 457 Plans
Sponsors – Relates to all direct contact
with the external customers where the subject is primarily or exclusively IRC 403(b)
Annuities and/or IRC 457 Plans. The above noted educational outreach, where applicable,
will involve coordination with Exempt Organizations and Government Entities.

Multiemployer Plans – Relates to all direct contact with external customers where the
subject is primarily or exclusively Multiemployer Plans.

IRC 401(k) Plans – Relates to all direct contact with external customers where the
subject is primarily or exclusively IRC 401(k) Plans.

Speaker Mentoring – Includes activities of Mentors, Speakers and EP CE & O Analysts
involved in the TE/GE Speaker Mentoring Pilot Program.


II. OUTREACH (Indirect Contact)

CE & O will centrally coordinate outreach activities to foster customer partnerships,
increase customer education and leverage existing resources to develop and deliver
outreach products. For instance, CE & O will outreach to customers by indirect contacts
through its outreach products such as Employee Plans News, educational videos,
educational diskettes/CD-ROMs, and publications. The available products will be offered to
customers through various outreach options (for example, IRS Internet website or customer
partnerships).

Employee Plans News – CE&O will issue 4 editions (Fall, Winter, Spring and Summer)
plus periodic special editions.

Forms/Publications – CE&O will maintain existing forms and publications. Efforts will be
undertaken to assess external customers’ needs on any necessary changes to existing
forms/publications plus consideration of new publications.

Intranet/Internet - The CE&O Staff will maintain and ensure through an Internet/Intranet
Team that:


Employee Plans Corner (Internet) meets customer needs for educational
information/resources that are timely and accurately available


EP Intranet (for IRS employees only) meets employee satisfaction for timely and
complete information. CE&O will coordinate content for the EP Intranet with each
office responsible for their applicable information on the EP Intranet.

CE&O will develop priorities in posting content to both the Intranet and Internet. These
priorities will include category from critical to low.

Additionally, a concerted effort will be coordinated by CE&O to ensure that content is
posted and maintained on the EP Intranet so that all employees have access to all
available information necessary for them to perform their applicable duties. For instance,
all issued memorandums and procedures are posted to the Intranet for access by
employees.


18
The Internet/Intranet Team will include a
primary senior CE&O Analyst plus each
area CE&O Area Analyst as a coordinator on the team for each respective area office plus
analysts for Programs & Review and Rulings & Agreements. This team will coordinate the
development and posting of Internet/Intranet content.

Customer Partnerships - involves developing partnership with government agencies,
practitioner/stakeholders groups (e.g., ABA, ASPA, AICPA, etc.) and advisory councils of
practitioners who provide input to EP. In FY 2002, the EP CE & O Staff will establish a
Customer Partnership Team with a primary senior EP CE & O Analyst plus each area EP
CE & O Area Analyst as a coordinator on the team for each respective area office plus
analysts for Programs & Review and Rulings & Agreements. This team will coordinate
national customer partnerships. Individual area analysts will work locally in each respective
area on customer partnership efforts through applicable customer partnership groups.
Also, this team will nationally coordinate EP Benefits Conferences and articles for each
edition of the Employee Plans News.

Products Development - Projects will be undertaken to develop outreach products
based on:


As priority, supporting EP compliance activities to increase compliance among specific
market segments (such as IRC 403(b)/457 Plans, Multiemployer Plans, and IRC 401(k)
Plans). Also, explore options for outreach products relating to three new EP Nationwide
Research Samples on Non-Filers, SEP Adopters and Third Party Administrators.


Through CE&O monitoring of non-compliance trends (based on input from both internal
and external sources).

Resources for developing outreach products will be provided by all key EP processes plus
from other TE/GE offices where there are relationships to EP customers such as EO and
GE.

For FY 2002, Outreach Products will include the following:

Description
IRC 403(b)/457 Educational Outreach Interactive CD-ROM –
Delayed until 2nd Quarter FY 2002

IRC 403(b)/457 Educational Outreach Diskette (Updated for
EGTRRA) (Publication 3737) – To be issued in October 2001

EPCRS Educational Outreach Video – Development phase
will begin in FY 2001

EPCRS Educational Outreach Interactive CD-ROM –
Development phase will begin in
FY 2001

The marketing plan for the IRC 403(b)/457 Educational Outreach Video will be
implemented fully in FY 2002.


CE&O will support several TE/GE Major Strategies during FY 2002:


19
Meet Customer Needs

The following operating priorities will address this strategy:


Establish partnerships with customer and stakeholder groups to better address
growing customer demand for information and services. Partnerships will be
fostered and leveraged to support information gathering on customer needs, the
dissemination of education and outreach materials, and evaluation of outreach
effectiveness. Data on customer needs will be collected along with internal data to
prioritize the information and services required. Identification of external stakeholder
groups will be completed, and the groups will be prioritized based on the potential for
partnering opportunities and the potential impact of partnering efforts.


CE&O will also continue the following two FY 2001 operating priorities to support
Rulings & Agreements in managing the significant increase in determination
receipts:

Implement a marketing strategy to encourage the use of standardized plans.
Because standardized plans can be processed more quickly, EP will partner with
stakeholders to promote their use, rendering the peak workload more
manageable. Joint outreach efforts with SB/SE to encourage small businesses
to use standardized plans will continue. TE/GE will use feedback from
stakeholders who prepare determination letter applications and market
standardized plans to better understand and remove obstacles that inhibit
adoption of standardized plans and to develop more effective marketing
strategies.

Improve determination letter communications, application and review processes.
CE&O will deliver tools and outreach to the practitioner community to improve the
quality and completeness of determination applications. EP Customer Education
and Outreach, in conjunction with the Cincinnati office, will help customers
perfect their determination letter applications by placing checklists and up-to-date
information on the EP web page. Cincinnati personnel have also increased their
outreach efforts with TE/GE Area Offices to enhance consistency in the
processing of the determination applications. Specific actions will include
newsletter articles on determination tips in the Employee Plans News, special
editions of the Employee Plans News and content posted to the Employee Plans
Corner (Internet).

Improve Organizational Performance

The following operating priority will address this strategy:


Define and develop methods for measuring the effectiveness of the customer
education program and outreach activities. Balanced measures and indicators will
be developed to evaluate the effectiveness of customer education programs and
outreach activities. These measures and indicators will need to provide meaningful
information on the wide variety programs TE/GE employs to educate and inform a
diverse customer base. Performance data will help TE/GE deliver education and
outreach programs that provide the most value to customers.



20

Improve Knowledge and Information Management

The following operating priority will address this strategy:


Develop data management tools for compliance resolution and outreach programs.
For education and outreach programs across EP, EO and GE, this project will
provide reliable nationwide information to plan and track outreach events, facilitate
relationship building and coordination with external stakeholders, and serve as a
knowledge base for issues and resources. In the short-term, EP CE & O will utilize
the EP Customer Education Database and other databases/tools as follows:

CE & O Activities
Short-term Tools
EP Customer Education Program

o Benefits Conferences
Stand-Alone Database
o Speeches/Panels/Workshops
EP Customer Education Database
o Speaker Mentoring
EP Customer Education Database
EP Outreach
o Employee Plans News
Stand-Alone Database
o Forms/Publications
Stand-Alone Database
o Intranet/Internet
Stand-Alone Database
o Customer Partnership
Stand-Alone Database
o Products Development
Stand-Alone Database
EP CE & O Support Activities

o Promotional Items, Personnel, Supplies,
Equipments, Program Travel Budget,
Monitoring, Training, etc)
Stand-Alone Database & MS Outlook



21

ATTACHMENT IIC
PAC 1E – Rulings & Agreements
EP Rulings & Agreements Program Guidance

Rulings & Agreements will focus on ensuring compliance by offering up-front compliance
programs achieving the following objectives:


Issue timely and accurate determination and Volume Submitter advisory letters to
applicants.

Provide easily accessible and equitable voluntary compliance programs.

Issue timely and accurate: 1) opinion letters to sponsors of Master & Prototype plans; 2)
private letter and actuarial rulings; and, 3) other technical/procedural guidance.

I. DETERMINATION PROGRAM

A. General Information


Revenue Procedure 2000-27 opened the EP Determination Program for “GUST”. This
Rev. Proc. also extended the remedial amendment period until the last day of the plan
year beginning on or after January 1, 2001.

Notice 2001-42, issued on June 28, 2001, provides that the GUST remedial amendment
period will not be extended for individually designed plans. However, a separate and
later remedial amendment period is being provided for the Economic Growth and Tax
Relief Reconciliation Act of 2001 (EGTRRA).

As a result, the vast majority of individually designed plans will submit determination
applications on or before 12/31/01.

Notice 2001-56 provides guidance on the effective dates of certain EGTRRA provisions.

Notice 2001-57 provides sample EGTRRA plan amendments.

B. Volume Submitter Applications

The receipt of 1100 Volume Submitter applications will have a continuing
impact on resources that need to be applied to the determination program.
Although approximately 400 of these cases will be closed in FY 2001, and
many others have had significant time applied, the completion of the balance
of these cases is the highest priority in the determination program. All efforts
should be applied to closing these cases by February 1, 2002.



C. Training

Determination refresher training for Area Office employees started in the last
quarter of FY 2001 and will continue through the first quarter of FY 2002.
Area Office training requirements should be coordinated directly with
Cincinnati.




22
Approximately 45 revenue
agents/tax law specialists have been hired
and are being trained during Aug/Oct. to assist with the determination
workload. Cases that would normally be merit closed will be made available
for these agents during the OJI period of their training.

D. Technical Screening

Additional Technical Screening Centers will be established in the Area Offices
to assist with the screening function. Cincinnati personnel will serve as initial
instructors as well as make periodic visitations for consistency and quality
control. All efforts should be made to minimize technical screening backlogs
so that cases that do not require assignment to a group can be closed as
timely as possible.

E. Planning Assumptions

The following assumptions were used in planning the time applied to the
determination program in FY 2002:


An estimated 145,000 determination receipts are expected. More than half of the
receipts will consist of individually designed plans. Adopters of pre-approved plans
have until one year after the lead plan is approved to apply for a determination letter.
Most of these adopters will submit applications in the second half of FY 2002 and in FY
2003.

Volume submitter applications will receive the highest priority and all efforts should be
applied to closing these cases by February 1, 2002.

The 2nd level review of Volume Submitter applications will primarily be conducted by
Cincinnati, with support from the Area Offices.

Additional technical screening resources will be applied to keep this operation as timely
as possible.

Due to the anticipated volume of receipts, a high level of coordination between
Cincinnati and the Area Offices is crucial to ensure overall quality is maintained.

Based on the type of receipts expected, as well as an increase in Determinations
Quality Assurance staffing, an increase in determination time of grade 12 and 13 agents
is expected.

The number of new exam starts will be limited until the impact of the individually
designed plan inventory is determined.



F. Goals and Objectives


 Business results (quality)
 Timeliness (cycle time) - The computation of cycle time will be based on a 12 month
“rolling average.” While various cycle time/timeliness objectives have been
established, it should be emphasized to all managers and employees that cases
should not be closed prematurely simply to adhere to a cycle time objective.


 Merit closures (applicable to Ohio and the Area Office screening sites only) - the
objective is 75 days from the control date to the closing of the application (EDS table
6b.) The 12 month rolling average national baseline (as of 8/01) is 87 days;


23

 Disposal code 00 (applicable to
Ohio and the Area Office
screening sites only) - the objective is 100 days from the control date to the
closing of the application (EDS table to be determined.) There is no baseline for
this new designation of cases closed with customer contact by technical
screeners.


 Cases worked at the group level (status 75 or 52 to closing) - this includes all non-merit
closures (disposal codes 01 and 02), excluding those applications which were
transferred to other Area Offices (EDS table 9). The national objective is 125 days and
the 12 month rolling average national baseline (as of 8/01) is 138 days.


 All Cases - the national objective for all cases closed (merit and status 75 or 52 to
closing cases worked at the group level) with a determination letter issued is 155 days
(EDS table 8e). The 12 month rolling average baseline (as of 8/01) is 157 days.

Individual Area Office goals will be established by the Director Examination in
conjunction with the Area Managers.

 Determination Quality – this score is determined by the results of the TEQMS review
process. The FY 2002 goal is 83%.


 Business Results (quantity)
Determination cases closed will be used as a performance indicator.
Because of the uncertainty as to the volume and timing of the workload,
determination receipts will also be used to evaluate this measure.


 Customer Satisfaction
A rating of 5.7 is the goal for FY 02. Individual Area Office objectives will be
established by the Director, Examination. The Customer Satisfaction rating
for the latest quarter (period ending March 2001) for determinations was 5.65
out of a possible score of 7.0. Continuing efforts should be focused on
addressing areas where opportunities for improvement exist.
The following is a summary of the determination performance indicators that will be used in
FY 2002 for assessing the effectiveness of determination programs and activities:

Employee Plans
FY2001
8/01 Actual
FY2002
Goal
Timeliness (merit closures)
87
75
Timeliness (disposal code 00)
N/A
100
Timeliness (cases worked at group
level)
138
125
Timeliness (all cases)
157
155
Determination quality (6/01 actual)
83%
83%
Determination cases closed
23,119
106,000
Customer Satisfaction (3/01 actual)
5.65
5.7








24

II. VOLUNTARY CORRECTION PROGRAM
(UNDER EPCRS)

The Employee Plans Compliance Resolution System (EPCRS) provides a comprehensive
system of correction programs that permit plan/annuity sponsors to correct failures in IRC
401(a)/403(a) and 403(b) plans, thereby enabling them to provide plan participants with
retirement benefits on a tax-favored basis. EPCRS has three components:
- The Self-Correction (SCP),
- Voluntary Correction Program (VCP): Cases submitted under the VCP are
handled in R&A; and,
- Audit Closing Agreement Program (Audit CAP): these cases are handled in
Examination

The VCP includes separate procedures:

1) VCP General Procedures,

2) Voluntary correction for Operational Failures (VCO),

3) VCO Standardized (VCS),

4) Voluntary Correction of Tax-Sheltered Annuities (VCT),

5) Voluntary Correction of Group Failures (VC Group),

6) Voluntary Correction of SEP Failures (VCSEP) and

7) The Anonymous Submission procedures.

EP has reorganized to form a separate function devoted to administering its voluntary
correction programs. Staffing of Voluntary Compliance will be completed during FY 2002.
During FY 2002, Voluntary Compliance will focus on the following activities:

Producing a transition kit for managers and employees

Training new Voluntary Compliance employees

Updating Rev. Proc. 2001-17

Establishment of a Compliance Council to ensure consistency between Audit CAP and
Voluntary Compliance cases

Revising uniform national case processing procedures

Creating case grading criteria for Voluntary Compliance cases and

Creating TEQMS standards for Voluntary Compliance case

For these programs, coordination time should be planned separately from case time. The
public may obtain details on EPCRS via the IRS Internet site at the following address:
www.irs.gov/ep.

PERFORMANCE MEASURE

The number of voluntary compliance cases closed will be used as an indicator of
performance.

Employee Plans
FY2001
8/01 Actual
FY2002
Goal
Voluntary Compliance cases closed
981
1000


25

III. OPINION LETTERS/RULINGS

Employee Plans Technical is responsible for issuing opinion letters on various types of
Master and Prototype Plans; issuing private letter rulings; issuing general information
letters; assisting agents in all areas by issuing technical advice on
determination/examination cases; and, providing technical quality assurance.

Employee Plans Technical provides actuarial support inside and outside the Service in
various capacities. Each Area Office has access to at least one actuary to provide
technical guidance on difficult examination and determination issues.

Specific areas of focus in FY 2002 are:

a) M&P Program - Employee Plans Technical is processing the opinion letter requests of
sponsors of Master and Prototype Plans submitted under Revenue Procedure 2000-27.
The Revenue Procedure required all Master and Prototype plans to be
amended/restated to reflect numerous changes in the law referred to collectively as
GUST.

Master & Prototype applications will receive the highest priority of all cases in
Technical and all efforts should be applied to closing these cases by February 1,
2002. Priority in processing should be given to the plans of mass submitters and
national sponsoring organizations.

b) Private Letter Rulings – action on many of these cases has been delayed due to the
necessity to timely process the M&P workload. As M&P inventory is closed focus
should be directed to working these cases. Priority should be given to those with the
oldest control dates.

Employee Plans
FY2001
8/01 Actual
FY2002
Goal
Technical Activities closed
2592
3400

c) Non Bank Trustees - Area Offices should plan on using activity code 159 to conduct at
least one Non-Bank Trustee investigation per quarter during FY 2002 in accordance
with IRM 7.6.1. Selections will be based on the approved list of Non-Bank Trustees as
provided by the Director, EP Rulings and Agreements.


26

ATTACHMENT III
BAC 37 – Compliance Services
PAC 7G – Tax Reporting Compliance

EP Examinations Program Guidance

Examinations will focus on identifying and correcting non-compliance through the
following strategic goals:


conducting focused, efficient examinations.

resolving issues at the lowest possible level using appropriate resolution
mechanisms.

Ensuring consistency and fairness in application of law.

Maintaining a high level of Examination Customer Satisfaction.

Coordinating with other TEGE functions to identify emerging areas of non-
compliance.

Improving the quality of EP Examinations.

Specific Goals and Objectives


 Business results (quality)
 Timeliness (cycle time) - The computation of cycle time will be based on a 12 month
“rolling average.” The national objective for FY 2002 is 210 days. This time is
measured from placement in AIMS status code 12 (assigned – taxpayer contacted) to
closing (status code 90). Individual Area Office objectives will be established by the Director,
Examination.

While various cycle time/timeliness objectives have been established, it
should be emphasized to all managers and employees that cases should not
be closed prematurely simply to adhere to a cycle time objective.

The cycle time objective excludes all LMSB Large Case Support returns, all EP
Team Audit returns, all non-research sample Multi-employer returns, Technical
Advice and Appeals cases. Status code 55 has been designated for use to identify
cases that have previously been suspended for technical advice or have been to
Appeals and returned to EP for closing. Project codes will be used to identify LMSB
Large Case Support, EP Team Audit returns, and non-research sample multi-
employer plans. EP AIMS Table 61 will be used to monitor cycle time
accomplishments.

 Examination Quality – this score is determined by the results of the TEQMS review
process. The FY 2002 goal is 80%. Individual Area Office objectives will be
established by the Director, Examination. Actions will also be undertaken to develop
and successfully execute an action plan to improve three examination audit standards:
Examination Techniques; workpapers and reports; and timeliness. TEQMS results will
be published quarterly in monitoring reports from the TEQMS Review Staff.


27

 Business Results (quantity)
Examination cases closed will be used as a performance indicator. The number of cases
closed will be affected by the volume and timing of the determination receipts. For FY
2002, monitoring/measures based on the number of examined units will also be applicable
to all direct examinations categories. EP AIMS Table 20 will be used to monitor this
measure.


 Customer Satisfaction
An overall rating of 5.7 is the goal for FY 02. Individual Area Office objectives will be
established by the Director, Examination. The Customer Satisfaction rating for the latest
quarter (period ending March 2001) for examinations was 5.69 out of a possible score of
7.0. Actions should be initiated to address those areas where opportunities for
improvement exist.

The following is a summary of the examination performance indicators that will be used in
FY 2002 for assessing the effectiveness of examination programs and activities:

Employee Plans
FY2001
8/01 Actual
FY2002
Goal
Timeliness (cycle time)
190
210
Examination quality (6/01 actual)
72%
80%
Examination cases closed
9806
5800
Customer Satisfaction (3/01 actual)
5.69
5.7

Examination Initiatives

1. Fully conduct examinations relating to new Casework (CEP Support, EP Team Audit
Program, Referrals, Claims, Reversions, and Determination Conversions).
2. Fully conduct non-exam examination and activity relating to new pension underfunding
cases.
3. For Multi-employer Plans, IRC 403(b)/457 Plans and IRC 401(k) Plans, fully conduct
new examinations relating to these three EP Market Segments (except for new
examination cases identified under Casework, such as from a referral) through the
enhanced EP Market Segmentation Compliance Approach under the Compliance
Research Program. This approach will be utilized to document baseline data and to
make an assessment of the impact of EP’s compliance activities on these three market
segments. This enhanced approach includes four distinct phases: Compliance Planning
Phase, Case Selections/Training Phase, Project Examination Phase, and Assessment
Phase.
4. Complete/continue examinations on all cases in process that were started during
previous fiscal years.
5. Refine the EP compliance stratification by identifying, through the process of risk
assessment, those areas with highest levels of non-compliance; then in collaboration
with other TEGE functions such as Research and Analysis, develop appropriate
strategies to improve non-compliance in these areas.

EP Examination will shift resources to support and leverage the programs of Rulings and
Agreements and Customer Education and Outreach. Examination agents will be trained
for, and will be assigned these tasks.



28
I.
EXAMINATION
PROGRAM

The EP Examination Program focuses on a wide diversity of compliance activities relating
to direct examinations of both return and non-return units (plans with no Form 5500 Series
filing requirements). The program also includes examination support activities,
Examination Case Review and Closing Agreement Coordination.

DIRECT EXAMINATIONS

1. CASEWORK
Each Examination Area Office will examine the following types of casework (which arises
from known non-compliance activities.

a) CEP Support
Compliance Activity: Specific resources will be dedicated to LMSB Large Case
Support based on historical experience. These resources will be devoted
exclusively on a continuing basis (rather than adjusted by EP Determinations
workload variations).

b) EP Team Audit Case
Compliance Activity: Specific resources (3 pilot groups) will be dedicated to EP
Team Audit Cases during FY 2002. These resources will be devoted exclusively on
a continuing basis (rather than adjusted by EP Determinations workload variations.)

c) Referrals

Compliance Activity: The Classification unit will take appropriate action to ensure
that internal and third-party referrals (or indicators of specific non-compliance
behavior) are properly and timely classified in accordance with IRM 7.5.1,
Classification and Selection of Returns, Claims, and Information Items. Those
referrals requiring examination by an agent will be transferred to the appropriate
Area office for assignment.

For monitoring and follow-up activities, the Classification unit will use RICS as a
record-keeping system for all "incoming referrals".

d) Claims
Compliance Activity: The work plan will ensure time to conduct examinations on
appropriate claim cases, based on historical experience.

e) Reversions
Compliance Activity: The work plan will ensure time to conduct examinations on
appropriate reversion cases, based on historical experience.

f) Determination Conversions
Compliance Activity: The work plan will ensure time to conduct examinations, which
are based on conversions from determination cases, based on historical experience.

29

2. NATIONWIDE EXAMINATION INITIATIVES

Each Area Office will examine the following types of examinations.
a. Multi-Employer Plans
Each Area should plan only enough time to finish working those cases
already assigned to specialists, under project code 101. All new work with
Multi-Employer plans should be worked out of the research plan, in project
codes 208 – 212.

b. Pension Underfunding
1) Reported Funding Deficiencies - review monthly the Funding Deficiency
data (generated from RICS using the applicable standard query language and
report format) to identify all reported funding deficiencies. All RICS identified
returns (with a funding deficiency in the applicable year) must be
documented on RICS for all classification actions. All decisions for non-
examination must be fully documented. In all instances, verification of
the payment of applicable excise taxes and/or the correction of
deficiencies must be performed.

2) Issued Waivers – The work plan will ensure time to identify plans with verified
waivers and classify to determine if an examination is warranted.

3. SAMPLE RESULT CASES/CONVERTED NON-EXAMINATION CASES

Compliance Activity: No new Sample/Converted examinations are anticipated to be
started during FY 2002. However, depending on the volume and timing of the
determination workload in FY 2002, each Area Office may be requested to conduct a
limited number of examinations relating to Sample Result Cases/Converted Non-
Examination Cases.

(a) Sample Result Cases are based on sample tested RICS condition codes. Any
tested EP RICS condition codes may be used for selecting returns to the extent
necessary to meet resource needs. A recommendation for designating a
condition code as tested is based on determining, through research samples
analysis, that there is a significant level of non-compliance identified by using the
condition code in a statistical sample. No further testing is required except at a
later date when the criterion should be studied again to determine if the
noncompliance level has declined.

(b) Converted Non-Examination Cases to Examination where through non-
examination activities (i.e., either review of a response or a lack of response to a
compliance check letter to a taxpayer) a decision is made to convert the case to
an examination. These cases may arise from the EP Profiling Project, Pension
Underfunding, EP Returns Comparison Project or the Verification Project.

4. LOCAL CLASSIFIED ISSUES

Compliance Activity: Few new Local Classified Issue examinations are anticipated to
be started during FY 2002. However, depending on the volume and timing of
determination receipts, each Area Office may subsequently be asked to conduct
more examinations relating to Local Classified Issues, in order to meet staffing
needs. Local Classified Issues are based on using RICS to identify potential issues

30
of non-compliance (but where the
population may be too small to warrant a
Local/Multi-Area Research Sample). Selection criteria for these cases include
factors in addition to geographic location and/or case grades.

5. GENERAL CASES


Compliance Activity: Each Area Office may conduct examinations
relating to General Cases based on instances where it may be necessary to balance
return assignments to examiners for efficient use of travel dollars. Selection criteria
for these cases focus on geographic location and/or case grades. Overall time for
General Cases should not exceed 10% of Total Direct Examination time (from
both the Examination and Compliance Research Programs).

6. TRAINING CASES

Compliance Activity: Time will be planned for Training Cases, if necessary, based on
the 25 new Area Office hires. This will depend on the volume and timing of
determination applications during the fiscal year, and the availability of time for the
new hires to do examination work. Time is planned to continue work on training
cases started during FY 01.
II. COMPLIANCE RESEARCH PROGRAM

The Compliance Research Program consists of compliance activities relating to
Direct Examinations and Research Activities. Direct Examinations reflect the
following sample categories of Research Sample Cases (return and non-return
units):


a) Continuing Nationwide Research Samples

b) New Nationwide Research Samples (FY 2002)

c) Local/Multi-Area Research Samples

All new compliance research samples/projects will utilize a market segmentation
compliance approach. This approach will be utilized to document compliance
baseline data (from prior completed examinations) and to make an assessment (via
a new Compliance Research Project) of the impact of EP’s compliance activities on
these three market segments. This approach includes the following four distinct
phases: Compliance Planning Phase, Case Selections/Training Phase, Project
Examination Phase, and Assessment Phase.

1. Compliance Planning Phase –

This phase will involve the following planning activities:

a) Brainstorm compliance strategies for conducting a Compliance
Research Project on each market segment. These strategies include
developing sampling methodology, defining a mechanism for
determining the impact of compliance activities and capturing results
data for assessing future compliance activities.
b) Document baseline data on quantitative results (i.e., non-compliance
issues/trends) from prior completed examinations.

31
c) Develop training
materials and prepare a
training program for applicable examiners (assigned project cases).
Includes development of auditing techniques/tips and automated
workpapers tools.
d) Coordinate with TE/GE Research & Analysis on conducting the
projects.

Members of the compliance planning group applicable to each of these
market segments will complete these activities.

2.
Case Selections/Training Phase –

This phase will involve the sample selection and training of applicable
examiners (assigned sample cases).
3.
Project Examination Phase –

This phase will involve full scope examination of the selected project cases
and the capturing of closing results data (from the examiners’ workpapers).

4.
Assessment Phase –

This phase will make an assessment based on documented baseline data
and results of the project cases to determine the following:

a) impact of EP’s compliance activities on the applicable market segment;
b) define in quantifiable terms overall compliance and applicable
issues/trends; and
c) direction future compliance activities (i.e., quantity and scope of future
examinations).

For each segment, a project coordinator will monitor and oversee the completion of
the four phases. Furthermore, Examination Planning and Programs will handle
project facilitation during the phases.


DIRECT EXAMINATIONS

a) Continuing Nationwide Research Samples

1) Previous Fiscal Year Nationwide Samples
Compliance Activity:
Each office should complete activities related to the following in-process
Nationwide Samples:


EP Market Segment 5.1.3 - Ongoing Profit Sharing Plans

EP Market Segment 5.4.3 - Ongoing Money Purchase Pension
Plans

EP Market Segment 4.3 - Ongoing Defined Benefit Plans
EP Market Segments 3.6/5.5/6 - Other Plans
IRC 403(b)/457 Plans
Multi-employer Plans
IRC 401(k) Plans


i.) IRC 403(b) Tax-Sheltered Annuities and IRC 457 Plans

32

Compliance Activity:
Each area office should complete in-process examinations of non-research
sample related IRC 403(b) Tax-Sheltered Annuities arrangements.

All EP examinations of IRC 403(b) annuities and IRC 457 Plans must be
coordinated with any applicable examination activities conducted by Exempt
Organizations or Government Entities.

Proper and timely correction of all identified plan defects is our primary
objective in examining these entities.

To continue nationwide support for compliance activities relating to these
plans, the following are applicable:


 The IRC 403(b)/457 Workshop (Course 4274) will be conducted
during the third Quarter of FY 2002. The workshop provides an
excellent opportunity to share examination experiences to promote
consistent treatment of taxpayers under examination plus discuss
educational outreach and correction programs experiences.
Feedback on examination cases will be provided on identified
issues, the manner of resolving such issues and any other relevant
examination experiences.


 An IRC 403(b)/457 Compliance Planning Group will work on
various national assignments (See Exam Support Activities for
further details).


ii.) Multi-Employer Plans

Compliance Activity:
Each area office should complete examinations of multi-employer plans
started during prior years. Additionally, each office should put into process all
planned new starts during the year, under the existing project codes.

All open Multiemployer returns must be converted to Project Code 216
(instead of the Project Codes 208-212 used in 2001). New returns started
during FY 2002 should be assigned under Project Code 216.

To continue nationwide support for compliance activities relating to Multi-
employer Plans, the following are applicable:


 The Multi-employer Plans Workshop (Course 4209) will be
conducted during the fourth Quarter of FY 2002. The workshop
provides an excellent opportunity to share examination experiences
to promote consistent treatment of taxpayers under examination
plus discuss educational outreach and correction programs
experiences. Feedback on examination cases will be provided on
identified issues, the manner of resolving such issues and any
other relevant examination experiences.


33

 The Multi-employer
Plans Compliance
Planning Group was established to work on various national
assignments (See Exam Support Activities for further details).


iii.) IRC 401(k) Plans

Compliance Activity:
Each area office should complete examinations of 401(k) plans started during
prior years. Additionally, each office should put into process all planned new
starts during the year, under the existing Project Codes.

Two new controlled 401(k) samples are planned for FY 2002. These returns
should be started during this year. Time spent should be charged to Project
Codes 452 and 453.

To continue nationwide support for compliance activities relating to 401(k)
Plans, the following are applicable:


 The 401(k) Plans Workshop is planned for the 1st quarter of FY
2002. The workshop provides an excellent opportunity to share
examination experiences to promote consistent treatment of
taxpayers under examination plus discuss educational outreach
and correction programs experiences. Feedback on examination
cases will be provided on identified issues, the manner of resolving
such issues and any other relevant examination experiences.


 The 401(k) Plans Compliance Planning Group was established
to work on various national assignments (See Exam Support
Activities for further details).

b) New EP Nationwide Research Samples (FY 2002)

Exam Planning and Programs will begin the Compliance Planning Phase for
three new Research Samples during FY 2002:

 Non-Filers

SEP Adopters

Third Party Administrators

However, because of the expected volume of determination work during FY
2002, and the need for examination agents to help process the applications,
these cases will not be assigned to the Area Offices until FY 2003.

c) EP Local/Multi-Area Research Samples

Each area office should complete examinations of EP Local/Multi-Area
Research Samples started in prior years.

34

III. EXAMINATION SUPPORT ACTIVITIES

OTHER EXAMINATION SUPPORT

Use the following project codes to further define time applied to Classification
(Activity Code 313):

(a) Reported Funding Deficiencies - Project Code 700
(b) Issued Waivers - Project Code 701
(c) Reversions - Project Code 702


VEBA/IRC 125 SUPPORT

Use Activity Code 357 for time applied to VEBA support or IRC 125, Cafeteria Plans
support. Since EP does not have jurisdictional responsibility for IRC 125 plans,
exam activity should be limited to a support role.

EXAMINATION CASE REVIEW

Use Activity Code 315 for time applied to Examination Case Review.

CLOSING AGREEMENT COORDINATOR

Use Activity Code 320 for time applied to closing agreement coordination relating to
Audit CAP.

WORKCENTER COORDINATION

Workcenter coordination activities involves the time applied in support of the
following automation activities, including time spent in support of Report Generation
Software (RGS) development. Personnel assigned or detailed to the Dallas
Development Site in support of RGS development and related testing activities
should charge time to this activity code.



NTEU EP/EO RGS Users Group



Automation Support Staff – Individuals assigned to support RGS and
automation activities in each office should charge time to Workcenter
Coordination. This includes any activity related to laptop support.


 Automation Task Group – Individuals assigned to task groups to support
RGS automation activities should charge time to Workcenter Coordination.


System 5500 Coordinators – Time spent in support of System 5500 should
be charged to Workcenter Coordination.


CEP Workcenter – Time spent in support of the CEP Workcenter
development should be charged to Workcenter Coordination.


35
Compliance Planning Sessions –These
sessions/meetings will support the
development of strategies for handling various plans of the key processes. For example,
the following are brainstorming sessions:


Strategy meetings to support proactive education under the Customer
Education Program;

Meetings with Rulings & Agreements and Examinations to identify and to
determine the priority of CE&O projects (and to estimate resources
necessary) as part of the CE&O Multi-year Work Plan.

Meetings to plan strategies to address exam case quality and customer
satisfaction issues.

IRC 403(b)/457 Compliance Planning Group – This group will consist of Program
Analysts, Tax Law Specialists, each area’s IRC 403(b)/457 Educational Coordinators (plus
additional at-large agents) and other representatives (i.e., CE&O).

The group will meet at least twice a year for working sessions (5 days each session)
in a central location. Additional work (minimum 40 hours) will be completed in the
employees’ POD. The EP Directors based on identified needs determine the group’s
working assignments.

For the IRC 403(b)/457 Plans Baseline/Assessment Project, there will be both a
Project Coordinator and Project Facilitator.

Multiemployer Plans Compliance Planning Group – This group will consist of EP
Program Analysts, Tax Law Specialists, multiemployer plans examiners (at least one from
each area office) and other representatives (i.e., CE&O).

The group will meet at least twice a year for working sessions (5 days each session)
in a central location. Additional work (minimum 40 hours) will be completed in the
employees’ POD. The EP Directors based on identified needs determine the group’s
working assignments.

For the Multiemployer Plans Baseline/Assessment Project, there will be both a
Project Coordinator and Project Facilitator.

IRC 401(k) Plans Compliance Planning Group – This group will consist of EP Program
Analysts, Tax Law Specialists, IRC 401(k) plans examiners (at least one from each area
office) and other representatives (i.e., CE&O).

From the group members, a group facilitator will be selected. Group facilitator’s
responsibility include the scheduling of group meetings and ensuring group’s
discussions keep on target in timely completing assignments. The group will meet at
least twice a year for working sessions (5 days each session) in a central location.
Additional work (minimum 40 hours) will be completed in the employees’ POD. The
EP Directors based on identified needs determine the group’s working assignments.

36

ATTACHMENT IV
Other Operational Program Guidance

Other Operational includes all technical time activities that apply to all PACs and do not
involve case related activities. Other Operational includes the following activities:


General Administration


Other Support Activities


Indirect/Administrative


Management


Training (see attachment V)


Details


Leave

GENERAL ADMINISTRATION

The following monitoring codes are applicable to General Administration:

Compliance Activity
Activity Code Project Code
GAO/TIGTA/Other External Reviews
Coordination
186
N/A
Business Reviews and Other Program
Visits
187
N/A
Congressional/Legislative Matters
188
N/A
Satisfaction Surveys
189
N/A
Recruitment

Recruiting
191
N/A
Recruiter Training
192
N/A

OTHER SUPPORT ACTIVITIES

The following monitoring codes are applicable to Other Support Activities:

Compliance Activity
Activity Code Project Code
Automation Activities

152
N/A
Clerical Support
164
N/A
Clerical Support – Case Related
165
N/A
Management Support
166
N/A



INDIRECT/ADMINISTRATIVE

The following monitoring codes are applicable to Indirect/Admin Activities. Activity codes
827 and 828 are new in FY 2002.

Compliance Activity
Activity Code Project Code
Administrative Duties
730
N/A
Non-Case Technical Duties
610
N/A
Partnering Council
828
N/A
General NTEU Activities
827
N/A

37

MANAGEMENT

The following monitoring codes are applicable to Management Activities. Several of these
codes have been re-named from FY 2001 and new definitions have been added. Activity
code 680 is new for FY 2002.

Non – Supervisory (NBU) – Staff
Assistants only
640
N/A
First Level Management
618
N/A
Mid-Level Management
650
N/A
Other Management
660
N/A
Case Related Management
680
N/A





38

ATTACHMENT V

FY 2002 TRAINING COURSES

The following items are descriptions of the planned FY 2002 training courses:

CUSTOMER EDUCATION & OUTREACH TRAINING

Course 4311: CE&O Workshop

This training is for EP CE&O Analysts and Educational Coordinators. The purpose of
the training is to learn new operating priorities, updated operating procedures, provide
training on the CE&O database and on the Internal Communications systems. The
course is 5 days in length and scheduled for the 1st quarter.

Course 4315 EP: CE&O Presentation Skills/Tools Workshop

This training is for all CE&O Program Analysts, and CE&O Customer Education Cadre
Employees. The purpose of the training is to learn/practice effective public speaking
techniques and use of tools for effective public speakers (for example, the use of
PowerPoint, Multimedia Projectors, Desktop Publishing, etc.). The length of the
training is 4 course days (includes training and travel time) and will be conducted in
the 3rd quarter.

EP SPECIAL EMPHASIS TRAINING

Course 4209: Multiemployer Plans Workshop

This annual workshop will support the compliance activities related to multiemployer
plans. Such compliance activities include examinations, determinations, educational
outreach, and periodic focus group sessions. The targeted audience is all technical
employees involved in compliance activities related to multiemployer plans. The length
of training is 5 course days (includes training and travel time) and is scheduled for the
4th quarter.

Course 4223: IRC 403(b) Annuities Training

This training will technically and procedurally train new employees assigned to groups
who will be involved in compliance activities related to IRC 403(b) annuitites. The
length of training is 5 course days (includes training and travel time) and is scheduled
for the 1st quarter.

39

EPTA TRAINING

Course 4287: EPTA Team Member Training

This training will technically and procedurally train employees assigned to the EPTA
pilot program on EP team audit skills and requirements. The length of the training is
10 days (includes training and travel time) and is scheduled for the 1st quarter.

Course XXXX: EPTA Case Manager Training

This training is for new case managers in the EPTA pilot program and deals with
functional and technical aspects of the position. The length of the training is 5 days
(includes training and travel time) and is scheduled for the 1st quarter.

Course XXXX: EPTA TEQMS/Balanced Measures

This training covers the new TEQMS/Balanced Measures standards for EP Team
Audit/Large Case Exams. The training will be provided to all EPTA pilot employees.
The length of the training is 5 days (includes training and travel time) and is scheduled
for the 1st quarter.

Course XXXX: Access Training/Statistical Sampling/Advanced Excel

This training covers a variety of skills required of EPTA pilot employees, including
Access, Stat Sampling, and Advanced Excel. The length of the training is 5 days
(includes training and travel time) and is scheduled for the 2nd quarter).

EMPLOYEE PLANS REPORT GENERATION SOFTWARE (RGS) and AUTOMATION
TRAINING

Course 4240: RGS 2.0 Training

This class will train EP RGS users on the new windows version of EP RGS (formerly
referred to as System 5500 Workcenter). The targeted audience is all EP Examiners
conducting examinations in FY 2002, EP Reviewers and EP Managers involved with
cases in the EP Examination Program. The length of training is 5 course days
(includes training and travel time) and is scheduled for the 4th quarter.

Course XXXX: RGS LAN for Managers and Secretaries

This class will train all EP examination managers and secretaries on the use of RGS
LAN. The length of the training is 4 days (includes training and travel time) and is
scheduled for the 2nd quarter.
Course XXXX: RGS LAN Train the Trainer

This class will prepare the instructors to teach the RGS LAN to managers and
secretaries. The length of the training is 5 days (includes training and travel time) and
is scheduled for the 2nd quarter.

40

NEW HIRE TRAINING

Course 4276: EP Determinations - Phase 1

This training will focus on providing determination training for new employees. The
training is 4 weeks long (includes training and travel time) and will be held during the
4th quarter.

Course 4286: FAECP

This training supports the FAECP rollout of the NT laptop computers for new EP
examiners. The length of the training is 5 days (includes training and travel time). It is
offered as new agents are hired.

CLASSIFICATION/RESEARCH TRAINING

Course 4278: EP RICS Users Workshop

This training is conducted to update and improve the skills of experienced RICS
Users. The length of the training is 5 days (includes training and travel time) and is
scheduled for the 2nd quarter.

OTHER EP TRAINING

Course 4213: EP CPE

This training will be provided during the 3rd or 4th quarter of FY 2001 and will be 32 to
40 hours in length. The targeted audience is all technical employees.

Course 4293: Introduction to New IRM

This is an aid to familiarize all agents/managers with the new IRM format. Training to
be provided throughout the year.

Course XXXX: Classroom Instructor Training

This training is for employees competitively selected as Classroom Instructors. The
course is 2 weeks in length and is targeted for the 2nd or 3rd quarter.